from the evergreening-profits dept

One technique in the world of pharma that has started appearinghere on Techdirt is "evergreening" -- making small changes to a drug, often about to come off patent, in order to gain a new patent that extends its manufacturer's control over it. The advantages for pharma companies are evident, but what about the public? What economic impact does evergreening have? That's what a fascinating new paper in the open access journal PLoS Medicine seeks to establish:

The researchers identified prescriptions of eight follow-on drugs issued by hospital and community pharmacists in Geneva between 2000 and 2008. To analyze the impact of evergreening strategies on healthcare spending, they calculated the market share score (an indicator of market competitiveness) for all prescriptions of the originally patented (brand) drug, the follow-on drug, and generic versions of the drug. The researchers then used hospital and community databases to analyze the costs of replacing brand and/or follow-on drugs with a corresponding generic drug (when available) under three scenarios (1) replacing all brand drug prescriptions, (2) replacing all follow-on drug prescriptions, and (3) replacing both follow-on and brand prescriptions.

And here's what they found:

Using these methods, the researchers found that over the study period, the number of patients receiving either a brand or follow-on drug increased from 56,686 patients in 2001 to 131,193 patients in 2008. The total cost for all studied drugs was €171.5 million, of which €103.2 million was for brand drugs, €41.1 million was for follow-on drugs, and €27.2 million was for generic drugs. Based on scenario 1 (all brand drugs being replaced by generics) and scenario 2 (all follow-on drugs being replaced by generics), over the study period, the healthcare system could have saved €15.9 million and €14.4 million in extra costs, respectively. The researchers also found some evidence that hospital prescribing patterns (through a restrictive drug formulary [RDF]) influenced prescribing in the community: over the study period, the influence of hospital prescription patterns on the community resulted in an extra cost of €503,600 (mainly attributable to two drugs, esomeprazole and escitalopram). However, this influence also resulted in some savings because of a generic drug listed in the hospital formulary: use of the generic version of the drug cetirizine resulted in savings of €7,700.

Obviously, this is just one study, in one area, although on the plus side it involves quite a long time period, and many patients. Despite its limitations, it nonetheless offers a useful first analysis of the economic impact of evergreening drugs. It's certainly an aspect of drug prescription that hospitals and doctors need to consider. As the study concludes:

Evergreening strategies have been successful in maintaining market share in Geneva, offsetting competition by generics and cost containment policies. Hospitals may be contributing to increased overall healthcare costs by listing follow-on drugs in their RDF. Therefore, healthcare providers and policy makers should be aware of the impact of evergreening strategies.

That suggests we can expect to see many more evergreened drugs in the future as highly-profitable compounds start to come off patent, and pharma companies search for ways of maintaining their high profit levels.

from the and-this-is-medical-innovation? dept

Big pharma often gets a rather rough ride here on Techdirt, what with its attempts to stop governments granting licenses for life-saving and low-cost generics in emerging countries, engaging in legal action to prevent drug safety information being released, and paying kickbacks to doctors. But sometimes you get the impression that drug companies really go out of their way to be disliked, as this great post by Josh Bloom on the Medical Progress Today site, pointed out to us by John Wilbanks, demonstrates:

[Merck] just received approval for the cholesterol-lowering combination drug Liptruzet -- a functionally similar (identical?) version of their own Vytorin, which is a combination of their statin Zocor and Schering's (now part of Merck) cholesterol absorption blocker Zetia (ezetimibe).

Liptruzet, ironically happens to be a combination of Zetia and atorvastatin (generic Lipitor). Yes -- Merck is substituting a former Pfizer drug for their own Zocor with combining it with Zetia to make a "new" medication with additional patent protection.

If it were just another case of trivial "innovation", the story wouldn't hold much interest. But there's something more here:

[Liptruzet] reduced LDL cholesterol more for patients who took Lipitor alone, but it did not reduce patients' chances of developing heart disease. Not surprisingly, this left some doctors to wonder why it was approved at all.

Bloom quotes an interesting comment on this from Philip Gelber, Chief Cardiologist at Cardiovascular Consultants of Long Island:

"The modern movement requires that drugs not just be safe and effective in their immediate goal, but to also show efficacy in improving outcomes. Cardiac medications should not just reduce the cholesterol count, but reduce the risk of heart attack and stroke as well." He continues, "There was, I'm sure, pressure by big pharma to get this approved, which by pairing it with another drug, would in effect restore blockbuster Lipitor back to branded status."

Over 14.5 years, the cholesterol-lowering medicine has made over $125 billion in sales, and has provided up to a quarter of Pfizer Inc.'s annual revenue for years.

Bloom goes on to explore the FDA's role in this surprising approval of a drug that offers no additional benefit over Lipitor, and notes that the agency doesn't come too well out of this business either. As he concludes:

This episode just plain smells bad on many levels. I get the feeling that just about everything except science is driving this, and this will be a black eye that Merck will be inflicting on itself and the rest of the industry.

In other words, it doesn't look as if the pharmaceutical industry's image is going to improve any time soon....

from the that's-the-way-to-do-it dept

A few weeks back, we wrote about the Indian Supreme Court's rejection of Novartis's attempt to use "evergreening" to prolong its patent on Gleevec, sold as Glivec in India. That term refers to the trick of making small changes to a drug, usually one about to come off patent, in order to gain a new monopoly that extends its manufacturer's control over a medicine. But how does that work in practice?

A recent story in The New York Times answers that question for us. It concerns the painkiller OxyContin, produced by Purdue Pharma. The main ingredient was supposed to be released gradually, for extended pain relief, but some inventive types started crushing the pills in order to get a big, single hit -- often with fatal results. So in 2010, Purdue Pharma came up with a new physical formulation that was designed to make it harder to mis-use in that way, and obtained a patent on it. Fair enough, you might think: surely it's just trying to stop the abuse of its products and save lives? Well, maybe, but as The New York Times story now tell us:

In a major policy move, the Food and Drug Administration [FDA] said Tuesday that it would not approve generic versions of the powerful narcotic OxyContin, the painkiller that symbolized a decade-long epidemic of prescription drug abuse.

That's because there was apparently a fear that the generic versions would be abused in the same way as the older formulation from Purdue. What's interesting here is the FDA's timing:

The decision by the F.D.A. came on the day when the patent for the original version of OxyContin was set to expire. That would have allowed generic producers to introduce their own version of the formulation. F.D.A. officials said that several producers had applications to sell a generic form of OxyContin pending before the agency.

Of course, now there won't be any generic versions -- at least, not immediately -- and so the price of OxyContin probably won't drop precipitously, and Purdue will keep making a nice profit from it.

That is a perfect demonstration of how evergreening works. Getting a new patent on a tweaked version of a drug that effectively extends a company's monopoly control beyond the original patent term is not enough on its own; what's then needed is some reason why the much cheaper generic versions of the original drug without the tweak are kept from the market. In this case, it's because they don't offer a formulation that combats mis-use.

Of course, it's good news that tamper-resistant versions will now be the norm, since that is likely to save lives. But as the New York Times article writes:

While companies like Purdue Pharma insist the public's health is their main concern, others note that producers introduced tamper-resistant versions of their products just as the drugs were about to lose patent protection.

I suspect we may see more of these interesting coincidences as other profitable drug patents are about to expire, and their manufacturers start to come up with yet more ways to "evergreen" them.

The Indian supreme court has refused to allow one of the world's leading pharmaceutical companies to patent a new version of a cancer drug, a decision campaigners hailed as a major step forward in enabling poor people to access medicines in the developing world.

Novartis lost a six-year legal battle after the court ruled that small changes and improvements to the drug Glivec did not amount to innovation deserving of a patent. The ruling opens the way for generic companies in India to manufacture and sell cheap copies of the drug in the developing world and has implications for HIV and other modern drugs too.

The key issue at stake is a practice known as "evergreening": making small changes to a drug, often about to come off patent, in order to gain a new patent that extends its manufacturer's control over it. It's a way of cheating on the implicit bargain of patents: that a government-backed monopoly is granted in exchange for the invention entering the public domain at the end of the patent's lifetime.

That's what makes today's decision so important. It's not just about allowing Indian generics manufacturers to offer Glivec for a fraction of the Novartis price; it's equally about establishing the principle that "evergreening" patents won't be as easy in India as it is elsewhere, where the practice is common. This will allow India's pharma companies to produce a wide range of drugs at low prices that can then be sold to emerging countries unable to afford Western prices.

"We strongly believe that original innovation should be recognized in patents to encourage investment in medical innovation especially for unmet medical needs," said Ranjit Shahani, Vice Chairman and Managing Director, Novartis India Limited. "We brought this case because we strongly believe patents safeguard innovation and encourage medical progress, particularly for unmet medical needs. This ruling is a setback for patients that will hinder medical progress for diseases without effective treatment options."

That's pretty much what you'd expect him to say, since we've heard it here on Techdirt so many times before: without patents that allow monopoly pricing and big profits, there will be no investment in new drugs, and everyone will suffer etc. etc. But this simply isn't true. Much of the fundamental research that leads to important new drugs is done in public laboratories, paid for by taxpayers around the world, not by pharma companies.

Here, for example, is the story of how Novartis came to gain its highly-lucrative monopoly on Gleevec/Glivec, as told by the key researcher who actually developed it: Brian Druker, chair of Leukemia Research and professor of medicine at the Oregon Health and Science University Cancer Institute. He explained how the crucial initial research was carried out in an opinion piece published on the Livemint site in 2007:

The basic research that led to the identification of enzyme inhibitors for CML [Chronic Myeloid Leukaemia -- the main condition that Glivec is designed to treat] dates back to 1960 with the identification of the Philadelphia chromosome in patients with CML by researchers at the University of Pennsylvania, Peter Nowell and David Hungerford. In 1973, Janet Rowley at the University of Chicago determined that the abnormal chromosome was due to a translocation of genetic material.

No pharmaceutical companies seem to have been involved in this early work, and they were also minor players in the crucial move out of the laboratory, into product development, as Druker explains:

In 1993, I moved to Oregon Health Sciences University in Portland and had a single goal of finding a company that had the best inhibitor for Bcr-Abl [the cancer-causing protein] and to bring it into clinical trials. My work in Oregon on a therapy for CML was primarily funded by public sources, particularly the National Cancer Institute. My persistence with scientists at Ciba-Geigy (now Novartis) helped to keep the development of imatinib on their agenda despite uncertainty from product managers.

So not only was the drug developed largely thanks to public funds, but the pharma company that ended up making all the profits from it wasn't even hugely enthusiastic about the project initially: it was only Druker's "persistence" that led to the drug being approved. And if you're wondering about his views on the current world of pharma, with its stratospheric prices and a habitual recourse to evergreening to extend patents way beyond their original life-span, here's what he wrote back in 2007:

Pharmaceutical companies that have invested in the development of medicines should achieve a return on their investments. But this does not mean the abuse of these exclusive rights by excessive prices and seeking patents over minor changes to extend monopoly prices. This goes against the spirit of the patent system and is not justified given the vital investments made by the public sector over decades that make the discovery of these medicines possible.

The fact that many key drugs have only been possible thanks to those "vital investments made by the public sector" is nearly always overlooked by defenders of the pharma patent system. It's another reason why the Indian Supreme Court's decision is not only right, but just.